...given just $20,000 by the incubator, and after the four-month program ended, the money was gone...
...after pivoting and focusing solely on letting teachers share lesson plans, Simons said he was able to score $50,000 in seed funding from Ulu Ventures and Silicon Valley VC Paul Sherer.
Now, Simons said, he's looking to raise an additional $500,000.
So is Simons just a kid with a particularly honed entrepreneurial spirit?
Exactly when did the definition of entrepreneur change from "build a sustainable business that provides value to its customers" to "survive long enough for the next round of investment"?
I admire Eric for his tenacity (most others would have quit long ago), but I'd much rather hear about when he actually sells something.
Cost to AOL was approximately nothing. AOL will spend more on worker time reading and joking about this article than they did on the cereal and ramen he ate. It's a rounding error.
The benefit to AOL is that they got a ton of good press for supporting young hackers. This is the first I've heard of the Imagine K 12 incubator, and I'm glad somebody's tackling this. AOL was smart to laugh it off in the press; this is the first positive thought I've had about them this decade.
Having been team lead/manager on several helpdesks, I know it costs $1,000-$2,000 per month for space & supplies for one employee (probably more if food is involved). Sure, it's a drop in the bucket for AOL, but just because they're a big company doesn't make trespassing and theft OK.
Office space is a fixed cost. Meaning with or without him, they would've paid that amount in rent. The same is true of the internet he used and the couch he slept on.
The only variable cost is the food he ate which was probably negligible all things considered.
There are lost opportunity costs (of the space), depreciation costs (wear and tear), and bandwidth still costs money. And now, the AOL PR people have to spend time of this.
I'm not saying these are large costs, but the degree of harm isn't an excuse.
If they needed the chair he was in, they would have just said, "Hey, who are you?" Opportunity cost was zero. Wear and tear would be negligible, and there is no way on earth AOL had to renegotiate their office bandwidth contract because one more person was coding there.
I suspect the AOL PR people are throwing a party that somebody managed to use "young" or "entrepreneur" in the same article with the word "AOL".
Also, degree of harm is certainly relevant. E.g. "No harm, no foul."
I'm not saying it was morally flawless, by the way. It was definitely somewhere between scrappy and duplicitous. And it was probably criminal if AOL really cared. I'm just saying that they don't actually care.
If nothing else he got free food, correct? If each meal cost AOL around $10 then that's $10 * 3 * (2 * 30) = $1,800 worth of damages. This is not including any snacks / soft drinks / free gym / other perks that he might be snatching on top of that. If he caused that much damage by taking and then selling books from a local library we'd be in uproar.
Comparing this to RMS isn't fair either. Everyone knew RMS was staying at the university -- his postal address was literally the desk he worked at.
Just as this guy stole quietly doesn't mean he didn't steal. He has raised $70k in funding and then has gone on to steal at least $2,000 from AOL. This isn't just unethical, it's illegal.
Each meal did not cost AOL anywhere near $10. The cost to AOL was marginal because they already had purchased all the food and drinks to cater to everyone else in the building at all times. That gives them good economies of scales. Furthermore, his use of office space, gym equipment and all the other perks and amenities he used also cost AOL marginally. It's a stretch to say he financially impacted AOL in any way (unless you factor how the building's insurers decide to factor his squatting stunt into increased risk and higher insurance rates, but that is also a stretch).
However, I do agree that he saved over $2,000, since he saved the difference between what it would have cost him to purchase his food and perks at market price elsewhere and what they actually cost.
I think they would. Suppose you extract the transplantable organs of a dead patient without permission, is it ethical? Have you harmed the patient? If the relatives don't find out, are they harmed?
But people have the choice of wether to live in that country or not. And citizens have the means to elect a new government to change that law. Because people that live in Spain know that the default is opt-in (or at least have the opportunity to find out), they have made a choice to either allow, or not allow organ harvesting. So, yes, removing the organs of someone who has not consented is unethical, regardless of the locale.
Spain (and many other countries) decided that they would rather be opt-out, so by default you've consented. This is actually a great example of the power of defaults to affect an outcome. Because of this out-out, the number of donations increases significantly.
I'd be more interested to know what happens to foreigners. I suspect that they aren't treated as consenting, but I don't know.
This goes to the definition of "ethical", and it's distinct from "moral", in the sense that ethics are a codified set of rules or guidelines: one does not judge something as ethical based on the result, but based on its conformity to a set of explicit or implicit expectations of conduct.
Ethics can be personal though, and there are many different forms, many of which explicitly focus on the result, and many which do not. I still think that it is very difficult to separate the concept of ethics from the notion of harm. Even where codified, the concept of avoiding harm, if only to members of your own clade for the more tribal forms, is pretty central to the formulation of pretty much all ethical systems.
I figured that was where they were going... but wanted to make sure - the word medic threw me.
"Do no harm" isn't as clear cut as that. You have to do harm all the time as a doctor - the question is what is the lesser harm? Would you rather have a few broken ribs, or a heart that isn't beating. Either way, you're causing harm. Most people would rather you crack a few ribs though.
(BTW, that phrase actually isn't part of the Hippocratic Oath [1][2])
Here's a different example. Is burning a religious text (Bible, Koran, etc...) ethical? What if it is in private? Is anyone harmed? Many people would consider this an unethical act, even if no one was around to see it. And if no one would see it (and thus be offended), where is the harm?
Another example: Imagine Alice is in a wheelchair and is shopping. She accidentally drops her phone on the floor. At that moment, Eve walks by, notices Alice struggling, and yet does nothing. Eve continues walking on her way. Did Eve cause Alice harm? Alice was already in trouble, and Eve didn't do anything help. However, Eve didn't do anything to cause Alice's problems. So you can't really claim that Eve harmed Alice, even though many would question her inaction.
This is just to point out that the concepts of harm and ethics aren't necessarily linked. But that is really moot in this case, because no one can really claim that this kid caused AOL no harm. It may just be really small in monetary terms.
[edit] And apologies for being unnecessarily obtuse earlier, one of the precepts for ethics in medicine is the phrase "First, do no harm", which is what I was obliquely blathering on about. So rather than being very different questions, the concept of harm is firmly tied to many of our concepts of ethical behaviour.
He used AOL infrastructure to build his company, I'm wondering if he disclosed that to investors as he's pretty liable to them otherwise.
It's lesson number #1 (don't use your employer's computer off-hours when working on your own projects) for people that try to build something outside their company's influence.
Hard to believe that this isn't also some kind of tort or trespass of which AOL could bring charges against him or stake a claim should he have some future gain from activities done at their expense (as nominal as that is).
I'm surprised they are treating it the way they are other than the obvious negative publicity that would ensue.
I mean if someone stayed for months in a department store overnight I don't think they would laugh it off or it might attract others to do the same.
I'm surprised they are treating it the way they are other than the obvious negative publicity that would ensue.
Negative publicity can be a very strong motivator.
It feels like not a week goes by that 'the internet' learns about some yahoo suing some other guy for shaky reasons, and becoming infamous as a result.
Soon after that the yahoo has to change his name and move to Tijuana.
I had to re-read this comment, because initially I thought you were trying to say that Yahoo! should pack up and move to Mexico after suing Facebook.
But yes, I think you're right. The negative backlash that AOL would get for attacking this kid vastly outweighs any sort of benefit they'd get. Now, this is all about spin and PR.
AOL might have a case... don't know, IANAL. Doubtless they could tie him up in court. However, I don't imagine they would try to touch him. The kid has the makings of a modern folk-hero—it could only result in bad PR for AOL if they did go after him.
The response from the AOL spokesperson makes it seem like they are taking the incident in good humour:
"It was always our intention to facilitate entrepreneurialism in the Palo Alto office -- we just didn't expect it to work so well."
But he's not an AOL employee and had no contractual obligation to them. He just crashed there, working on his own computer, and eating AOL's food and sleeping on their couches.
I don't think the story says so explicitly, but he was also probably using their network, power, etc. to do his work. I'm guessing they must have a guest wifi network or the like where a non-corporate computer connecting wouldn't raise any flags.
No, but if you steal his wifi, he might have a claim because you utilized his infrastructure (without consent) to make it. I'm not a lawyer, but I believe this has at least been raised in some situations where people used either company computers or other equipment to set up a new business.
Why is heat any different? If the temperature was too low, my fingers would have frozen off while typing.
(I think the answer in this case is: I didn't take any action to receive the heat. Now the question is: why can't I legally decrypt satellite TV that's being blasted through my brain 24/7?)
I believe that it has been ruled that technically you can decrypt the satellite TV legally. Provided that you do it 100% independently and do not attempt to sell plans, kits, etc. or otherwise profit from your ability to decrypt the signal.
Purchasing equipment that significantly enhances your ability to decrypt the signal (eg: a pre-programmed or altered smart card) is where you run into issues.
In the US, decrypting satellite TV without authorization is illegal under 47 USC 605(a)(6): "No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto."
Additionally, unauthorized decryption of a copyrighted program or movie is a violation of the DMCA, 17 USC 1201(a)(1): "No person shall circumvent a technological measure that effectively controls access to a work protected under this title."
Worst case, he has to reimburse them for the cost imposed, plus some sort of rent, plus some kind of punitive damages. No way does AOL get any sort of ownership out of this, though.
The worst case is that they argue that the company wouldn't exist without his misappropriation of AOLs resources and should be awarded X% of the company as compensation, where X is equal to the percentage of the company that equals the amount of money that he cost AOL in food, supplies, network access, etc... at the time of the misappropriation. They could argue that they were de-facto investors because of the material support they "offered".
Or they could keep him tied up in court trying to argue his way out of it.
The only reason why he is going to make it out of this okay is the bad press that AOL would get for going after him.
Does it really work that way? I thought you could be held liable for damages (including punitive), not hypothetical what-if scenarios. If I steal your laptop and use it to sell an app, then later I'm caught, I'll go to jail for theft, and you'll get your laptop back, but you won't get any ownership of the app I developed.
" Simons said he was able to score $50,000 in seed funding from Ulu Ventures and Silicon Valley VC Paul Sherer.
"I was aware" of Simons living at AOL, Clint Korver of Ulu Ventures told CNET. "Tenacity and commitment are key attributes of a great entrepreneur. Eric has these in spades as demonstrated by his willingness to do whatever it takes to get his company off the ground."
I don't think that's the issue here. He wasn't an employee. The question would be more, how would CA treat non-company work produced using a work computer.
I think you're absolutely right. I'm sorry to say it, but I also believe that all the comments to the contrary are just people who haven't bothered to learn anything about the subject.
This is a red herring. If you use the business facilities in a hotel, then the hotel doesn't own the work that you produce as a result of using their computers, network, etc.
An employment contract usually stipulates that all work done while being paid by the employer is work for hire, unless otherwise stipulated. In this case, no such contract exists. Intellectual property is default owned by the creator unless explicitly transferred otherwise.
There's a claim to be made here on trespassing and possibly illegal use of resources, which can be recovered through small claims. But there's really very little case to be made that the IP created through the trespass and use of resources somehow transfer to AOL simply by reason of their ownership of the infrastructure.
"don't use your employer's computer off-hours when working on your own projects"
California law protects individual side projects extremely well. I am not a lawyer, I could be wrong, but I believe these concerns are absolutely irrelevant in California. Relevant elsewhere, but not here.
2870. (a) Any provision in an employment agreement which provides that
an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without
using the employer's equipment, supplies, facilities ...
"without using the employer's equipment, supplies, facilities"
It's your employer's computer. Even in California you cannot use your employers resources for side projects and still be protected. They can't make a claim on your free time, but if you use their computer, you open yourself up to claims.
I'm not a lawyer either, but that was always the advice I've been given.
Now this kid was just dumb. By using AOL resources without permission he now has all sorts of potential issues. Probably the only thing that kept him out of jail was the good will of AOL.
Only if you have an employment contract. Simply using someone else's network or power or resources or air conditioning or free beer or shower doesn't grant the owner of that resource any claim to your intellectual property. They can only make a claim for expenses, damages, loss of revenues, etc. that can be directly traced from illicit use of those resources.
even in california, it is highly recommended that one not use work-provided resources for your side projects if you have even the smallest intentions of commercialising them.
No definition of entrepreneur that I've been able to find says that the business needs to be sustainable or provide value to customers. So I would answer that the definition has never changed from A to B, because it's never been A.
The definitions I've looked at do tend to say the entrepreneur takes on financial risk. He may not have done that.
The conditions for building a sustainable business are not always perfect. Most businesses are given up on too quickly. In fact, many successful businesses have or were within hours of running out of cash before they became successful, i.e. Pandora, early Pinterest, RealNetworks. It is only due to the few who have the courage, naivety, and tenacity to pull through that many of these companies still exist.
Entrepreneurship isn't about having a magical nose for value, and unerringly finding chests of gold at every turn.
Rather, it's about the optimistic spirit, the emotional strength, and ultimately the endurance to keep going even when it's so hard you don't want to get up out of bed.
If you figure this part of entrepreneurship out, as Eric has, you can probably build something amazing.
I think you need to lay off the entrepreneurship porn.
Entrepreneurship is about building a business, and people have demonstrated they can do that even if they're a pessimist, lack emotional strength, or have any kind of endurance.
...after pivoting and focusing solely on letting teachers share lesson plans, Simons said he was able to score $50,000 in seed funding from Ulu Ventures and Silicon Valley VC Paul Sherer.
Now, Simons said, he's looking to raise an additional $500,000.
So is Simons just a kid with a particularly honed entrepreneurial spirit?
Exactly when did the definition of entrepreneur change from "build a sustainable business that provides value to its customers" to "survive long enough for the next round of investment"?
I admire Eric for his tenacity (most others would have quit long ago), but I'd much rather hear about when he actually sells something.